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We use insights from the literature on currency crises to offer an analytical treatment of the crisis in the market for … Greek government bonds. We argue that the crisis itself and its escalating nature are very likely to be the result of: (a …
Persistent link: https://www.econbiz.de/10008757569
This paper develops a dynamic two-country neoclassical stochastic growth model with incomplete markets. Short-term credit flows can be excessive and reverse suddenly. The equilibrium outcome is constrained inefficient due to pecuniary externalities. First, an undercapitalized country borrows too...
Persistent link: https://www.econbiz.de/10010474855
potential costs of giving up monetary policy autonomy to form a currency union. It is found that the three national output …
Persistent link: https://www.econbiz.de/10011450312
Membership in a monetary union implies stronger incentives for nominal wage flexibility in the form of wage indexation and shorter contract length than nonmembership. For example, entry into a monetary union may cause a move from a non-indexation to an indexation equilibrium. But more wage...
Persistent link: https://www.econbiz.de/10011410646
We document that observed international input-output linkages contribute substantially to synchronizing producer price inflation (PPI) across countries. Using a multi-country, industry-level dataset that combines information on PPI and exchange rates with international and domestic input-output...
Persistent link: https://www.econbiz.de/10011619669
We develop a simple model that highlights the costs and benefits of fixed exchange rates as they relate to trade, and …
Persistent link: https://www.econbiz.de/10011568741
We estimate the causal impact of countercyclical interest rates on macroeconomic outcomes in open economies. To identify countercyclical interest rates, we construct a new database of short-term interest rates, principal exports, and international commodity prices for 40 economies from 1870 to...
Persistent link: https://www.econbiz.de/10013183777
How do trade costs affect international trade? This paper offers a new approach. We rely on a flexible gravity equation … their trade shares to assess the impact of trade costs. …
Persistent link: https://www.econbiz.de/10011867116
currencies relative to gold between 1929 and 1936. What were the currency war’s effects on trade flows? We use newly … trade-enhancing benefits of the global monetary standard, ending regime coordination and increasing trade costs. …
Persistent link: https://www.econbiz.de/10015178449
; vehicle currencies ; compositional multinomial logit …
Persistent link: https://www.econbiz.de/10003969238